Praful Chandarana, CFA, plans to start an IPS review business. If the regulator requires CFA charterholders to hold a financial advisor license, did Chandarana act ethically by skipping the license?

• A. Yes
• B. No, because the licensing requirement is inconsistent across regulators
• C. No, because the pension regulator does not require the license
• D. Not enough information

Answer: (A)

The main idea here is that ethics in this area depend on whether the activity you plan to perform actually falls under the licensed regulated service. If a regulator requires CFA charterholders to hold a financial advisor license, that license is needed to provide the regulated financial-advisory services. However, simply starting an IPS (investment policy statement) review business does not automatically mean you are providing regulated financial-advisory services. If the work you intend to offer is not giving financial advice or managing investments—i.e., it’s analysis or review rather than actual advisory recommendations—then the licensing requirement may not apply to that specific activity.

So, if Chandarana’s plan truly involves only reviewing and commenting on clients’ IPS without delivering financial advice or recommendations, then ethically skipping the license aligns with regulatory scope for that activity. That said, if the services evolve into providing financial advice or any activity that the regulator explicitly licenses, compliance would be required. The key takeaway is to match the licensed activity to the services offered and verify with the regulator what constitutes regulated financial-advisory work in that jurisdiction.